The first was its trade agency, the Export Credits Guarantee Department. The ECGD insured loans made by commercial banks.

The purpose was to encourage companies to export to risky areas. But in its pedantic way, Whitehall would only provide these guarantees for the UK component of such deals - the part that employed British engineers.

Companies had to state what agency fees were being paid abroad, because these sums were to be deducted from the total eligible for cover. Most "commissions" were deducted, because they disappeared offshore, frequently into the secretive arms of Swiss banks.

The second channel by which Whitehall knew of these corrupt deals was the Inland Revenue. Not only did the tax authority receive returns of bribe payments, it allowed them as tax deductions and was unwilling to stop the practice.

As the Department of Trade and Industry pointed out: "The Revenue function is solely to consider whether the payments were 'wholly and exclusively for the purposes of the trade' and to allow them as deductions if they were, without regard to the morality of the transactions." [document]

The third channel of knowledge was the most incriminating. In the 1970s, sterling was not convertible. All companies had to get permission to purchase foreign currency.

It was the Treasury's guilty secret.

"Most of the special commissions are paid into accounts in third countries - the implications of corruption are thus clear.

"We are alone among advanced industrial countries, through the exchange control, in knowing about these payments and authorising them ... The government has ... positive knowledge and is clearly involved." [document]